Financial acconting

Financial acconting

1. OVERVIEW

   • Introduction
     • Accounting is a business language. We can use this language to communicate financial transactions and their results. Accounting is a comprehensive system to collect, analyze, and communicate financial information.
   • Definition of Accounting
     • “the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which in part at least of a financial character and interpreting the results thereof.
   • Objectives and Scope of Accounting
     • 1. To keep systematic records: The primary objective of accounting is to help us collect financial data and to record it systematically to derive correct and useful results of financial statements
     • 2. To ascertain profitability: With the help of accounting, we can evaluate the profits and losses incurred during a specific accounting period.
     • 3. To ascertain the financial position of the business: A properly drawn balance sheet gives us an indication of the class and value of assets, the nature and value of liability, and also the capital position of the firm. With the help of that, we can easily ascertain the soundness of any business entity.
     • 4. To assist in decision-making: One of the main objectives of accounting is to take right decisions at right time. Thus, accounting gives you the platform to plan for the future with the help of past records.
     • To fulfill compliance of Law: Business entities such as companies, trusts, and societies are being run and governed according to different legislative acts.
   • Accounting Process
     • Accounting cycle refers to the specific tasks involved in completing an accounting process
   • Accounting Process
     • accounting process:
   • Accounting Concepts
     • Business Entity Concept
     • Money Measurement Concept
     • Going Concern Concept
     • Cost Concept
     • Accounting Period Concept
     • Matching Concept
     • Dual Aspects Concept
     • Objective Evidence Concept
     • Accrual Concept
   • Accounting Conventions
     • Convention of Consistency
     • Convention of Disclosure
     • Convention of Materiality
     • Conservation of Prudence
   • Classification of Accounts
     • Personal accounts
     • Real accounts
       • Tangible accounts
       • Intangible accounts
     •  Nominal accounts
   • Accounting Systems
     • Single Entry System
       • In this system of accounting, only personal accounts are opened and maintained by a business owner.
     • Double Entry System
       • Under the double entry system of account, every entry has its dual aspects of debit and credit. It means, assets of the business always equal to liabilities of the business.
     • Rules of Debit and Credit under Double Entry System of Accounts

Imágenes y archivos del mapa